Canadian stocks edged lower on Monday

Index Update:  After opening above the previous week's close, today the benchmark S&P/TSX Composite Index gave away earlier gains and traded below the flatline before settling at 33,093.32, down by 51.66 points (or 0.16%).

Macro Update:  On Saturday, U.S. President Donald Trump threatened to impose 100% tariffs on goods imported from Canada if Canada goes ahead with a free trade deal with China. Trump also stated that he cannot allow Canada to become a "drop-off port" for China to send goods and products into the U.S. In the Middle East, after the Iranian regime unleashed violence and killed several protestors who took to streets against the government, Trump ordered more U.S. naval forces to head to Iran. Iran announced that they are fully prepared to face the U.S. threat. The Bank of Canada is set to announce its new interest rates on Wednesday. Economists expect the central bank to hold the policy rates at the current 2.25%, based on the recent economic data.  The recent Bank of Canada's Business Outlook Survey, conducted in the last quarter of 2025 indicated that business sentiments are subdued though the fears of a recession have decreased.

Top Movers:  Among the individual stocks, Novagold Res Inc (5.53%), Ivanhoe Mines Ltd (4.48%), Eldorado Gold (4.45%), and Enerflex Ltd (2.88%) were the prominent gainers.

Our Stance: Momentum indicators remain favorable, with the 14-period Relative Strength Index (RSI) at 81.03, signaling overbought conditions but also suggesting that the correction is temporary and primarily driven by short-term profit booking. On the downside, 33,000 is the immediate support to watch, with further consolidation toward 32,700 possible if this level is breached. Overall, the TSX maintains its positive structure, and the current pullback is seen as a corrective pause within an ongoing upward trend. 

Commodity Update:  The yen held firm on Tuesday after two consecutive sessions of sharp gains, keeping traders alert to the risk of coordinated currency intervention by authorities in the United States and Japan. Yen strength weighed on the dollar, which hovered near a four-month low amid concerns over a potential United States government shutdown and policy uncertainty. Gold declined 0.43% to USD 5,100.80, silver slipped 5.11% to USD 109.70, copper eased 1.56% to USD 13,037.00, while Brent crude fell 0.60% to USD 65.22.

Technical Update:

The S&P/TSX Composite Index edged lower on Monday, declining 51.66 points (−0.16%) to close at 33,093.32, as short-term profit-taking tempered the recent upside momentum. Despite the minor pullback, the broader technical structure remains constructive, reflecting healthy market consolidation rather than a trend reversal. The index continues to trade comfortably above its 21-period Simple Moving Average (SMA), which is acting as a key dynamic support level and reinforcing the prevailing bullish trend. Momentum indicators remain favorable, with the 14-period Relative Strength Index (RSI) at 81.03, signaling overbought conditions but also suggesting that the correction is temporary and primarily driven by short-term profit booking. On the downside, 33,000 is the immediate support to watch, with further consolidation toward 32,700 possible if this level is breached. Overall, the TSX maintains its positive structure, and the current pullback is seen as a corrective pause within an ongoing upward trend.